Sophos' integration of whole disk encryption with its endpoint security gives channel partners a natural selling path for existing Sophos customers and a needed value add to compete in the fiercely competitive market for desktop protection.

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Endpoint whole disk encryption has become a hot technology in particular in the last couple of years, driven by regulatory compliance and concern over exposure of sensitive data through attacks and alarming number of laptops that are either stolen lost at airports or the back seats of taxis.

"Disk encryption has been around for a long time, and for a long time companies have blown it off," said Paul Roberts, analyst for the 451 Group. "It introduced an extra layer of complexity, but regulatory compliance and exposure has totally changed that; companies don't want to take that chance."

The announcements put Sophos in stronger competitive position with rivals McAfee Inc., which incorporates its Safeboot acquisition encryption in its data protection offerings, and Symantec Corp., which has an OEM deal with GuardianEdge Technologies Inc. Other competitors in the rapidly consolidating disk encryption market include Check Point Software Technologies Ltd., which bought Pointsec Mobile Technologies Inc. in 2006, and independent companies include Credant Technologies Inc. and PGP Corp.

In this economic environment, companies are looking for a relatively easy path to encryption.

"We're seeing demand for encryption rise on a monthly basis," said Luke Black, solutions group manager for security at Softchoice Corp. "What's important is how the security solution is being managed on a daily basis. Sophos consolidates management through a single console, a single pane of glass."

Softchoice was an Utimaco partner before the acquisition. In addition to Sophos, the technology solutions provider sells and supports competitors Trend Micro Inc., McAfee and CA Inc. through its 45 branch offices.

The initial integration is designed to give most companies an easy upgrade path, so it doesn't yet support smart card and biometric integration --customers can still opt for existing Utimaco products, such as SafeGuard Enterprise for that kind of capability. Sophos said capability will be available later this year.

Email Security and Data Protection integrates with Sophos Email Appliances and, of course, the former Utimaco SafeGuard MailGateway. Sophos also announced two Web security appliances, a high-end enterprise model and a branch office box, as well as a new line of Security Management Appliances to manage distributed deployments.

In the area of data protection, Sophos is also developing its own DLP capability, which will be available this year. Utimaco had been offering Trend Micro DLP through an OEM deal, but Sophos understandably plans to phase that out. Major rivals Symantec, McAfee and Trend have added DLP technology through acquisitions.

451 Group's Roberts said Sophos has a good track record of developing its own technology and releasing well-integrated products carefully to market.

"They are an engineering-driven company, focusing on doing a couple of products a year," he said. "They want to get the integration right, the management right."

The DLP technology will focus on the endpoint, building on Sophos' existing scanning technology.

The endpoint encryption will be available to Sophos customers at about a 20% premium over existing endpoint protection. Sophos is gearing up its channel to sell encryption for the long haul.

"Our near-term effort is to get biggest bang by ramping up existing channel partners with a product that's easy to implement and support," said Rainer Gawlick, Sophos chief marketing officer. "Focus number two is to recruit new channel partners to support growth rate."

Gawlick said Sophos will also work on broadening Utimaco's existing channel, which is not strong in North America.

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